Enterprises

Last updated: Wednesday, February 21, 2018

Tan Cang - Long Binh ICD: Exemplary Modern Logistics Centre

Posted: Wednesday, July 12, 2017

Situated in the southern key economic zone comprised of Ho Chi Minh City, Dong Nai, Binh Duong and Ba Ria - Vung Tau provinces, Tan Cang - Long Binh ICD plays an important role in supplying and connecting logistics services for customers in the region, in the country and in the world. To understand the journey to this success, Vietnam Business Forum Magazine has an interview with Mr Tran Trieu Phu, Director of Tan Cang - Long Binh ICD. Han Luong reports.

Could you please introduce the development progress and success of Tan Cang - Long Binh ICD in the past time?In early years, the area where Tan Cang - Long Binh ICD is located today was small lakes formed from quarrying activities and public dumpsites. After careful survey and consideration, seeing development prospects, the company levelled the ground and built warehouses covering 18,000 square metres in 2009. After 10 years of operation, Tan Cang - Long Binh ICD has to date completed construction on a 105 ha site with a modern warehouse area of over 400,000 square metres to deliver a wide range of services for customers. With the operating philosophy “Trust is all” and the mission “Making differences to bring efficiencies and high values to the business”, all employees of Tan Cang - Long Binh ICD have consistently focused on core business lines and constantly strived to “obtain the absolute trust” of customers. As a result, Tan Cang - Long Binh ICD has won the trust and support of many big customers such as Nestle, Pepsi, Nike, Canon, Suzuki, Abbott and Sanyo, as well as partners which are leading integrated logistics services providers like DHL, Kuehne Nagel, DB Schenker and Panalpina.

What has helped Tan Cang - Long Binh ICD have those successes?First of all, Tan Cang - Long Binh ICD is strategically located in the southern economic development quadrangle, in the vibrant industrial hub of the province, and the favourable gateway for ground-transported commodities in the region - the important supporting factor for the company's logistic operations. Besides, Tan Cang - Long Binh ICD always has correct anticipation on markets, demand, customers and development orientations to have the today position. In addition, the close leadership and assistance of Saigon Newport Corporation, the support and facilitation of Dong Nai authorities, the solidarity, enthusiasm and determination of every employee are the ultimate objectives for Tan Cang - Long Binh ICD to bring best services to customers.

Logistics is considered a service sector in the national economy. What are the difficulties that this sector is facing?In 2011, the logistics service sector was included to the Vietnam Services Development Strategy in 2011 - 2020 with a current growth rate of 20 per cent per annum. The Vietnamese economy is on a steady track of development, resulting in a higher demand for cargo transportation and logistics growth. The sector will grow at a double-digit rate in the next two decades.

Beside favourable conditions to maintain the development, the logistics industry is still facing numerous hardships.

Vietnam's logistics costs are currently rated very high, equivalent to about 25 per cent of its GDP (compared with 15 per cent of the world, 9 per cent in the United States, 13 per cent in Europe, 11 per cent in Japan, and 8 per cent in Singapore). The main reasons are: (1) Vietnam's transport infrastructure system is insufficient and weak relative to national development requirements, especially underdeveloped roads to the speed of industrialisation and urbanisation, leading to overload and congestion; (2) most Vietnamese logistics firms in operation have a small scale, limited capacity and ineffective connectivity, causing about 80 per cent of the Vietnamese logistics market to fall in the hands of a small number of foreign logistics firms; (3) Although State management agencies are carrying out many reforms to streamline administrative procedures and facilitate trade, many difficulties in customs clearance procedures slow down the speed of commodity turnover and increase business costs; (4) Inland shipping has not yet fully utilised its potential to reduce road transport loads; (5) the link between ports and post-port services (such as warehouses, yards and logistics centres) is limited by the lack of high-tech applications in logistics management, leading to high logistics costs; and (6) human resources are also a limiting factor for logistics development in Vietnam. Human resources can meet only demands by local firms and human resources training for this sector fails to meet demands due to the lack of high-quality specialised training institutions.

How should Dong Nai province invest to develop logistics, reduce expenses for enterprises and enhance economic competitiveness in the current context of Vietnamese economy?In 2013, Dong Nai was ranked 9th nationwide in foreign investment value attracted. According to Dong Nai development schemes to 2030, the province will build Long Thanh International Airport, Bien Hoa - Vung Tau Expressway, Bien Hoa - Vung Tau Railway, Dong Nai Port expansion and development and build ICDs and logistics centres. Thus, in the future, Dong Nai will have a lot of opportunities for stronger logistics development to unlock local potential.

Nevertheless, the logistics sector of Dong Nai province still fails to meet the demands of local and external enterprises for both quality and scale of logistics like other localities in the country. Facing this situation, the province must carry out logistics infrastructure development projects, with priority given to developing transport facilities to connect planned logistics centres and major seaports; build the appropriate legal framework for managing the logistics industry on the one hand and strengthening the cooperation of local logistics firms on the other hand to avoid fragmented operations to reduce overall costs and increase competitive capacity against foreign rivals. The province also needs to organise and encourage construction of intensive logistics training centres in order to step by step raise the level of human resources for future needs.

At present, Dong Nai province’s strong products include footwear, garment and textile, furniture, agricultural products, electronics and household appliances. Therefore, Tan Cang - Long Binh ICD will take these products as core customers. It will continue to build and design a higher standard warehousing system to serve goods not only in Dong Thap province, but also from the Central Highlands, Binh Phuoc, Binh Duong and the Mekong Delta. In the coming time, in addition to enhancing personnel quality, the company will continue to carry out drastic solutions to improve service quality for customers, with an emphasis placed on corporate culture and behaviour of Saigon Newport Corporation, ensure its operations in the principle of military discipline coupled with economic dynamism.

With these practical directions, with the support of local authorities, Tan Cang - Long Binh ICD is confident to become an exemplary modern logistics centre to provide customers with higher-quality services at a reasonable cost to bring harmonious benefits to all parties.